The maker of Bisto gravy and Loyd Grossman sauces, Premier Foods, has posted a 1.0% decline in Q3 group sales, despite reporting a strong Christmas period (+4.5%).
The UK-based food company has said that as a result of the Q3 performance, its trading profit expectations for the year are likely to be 10% lower than previously anticipated. It did note, however, that the majority of its major brands ‘grew volumes and market share in Q3’.
“Sales in our third quarter were weaker than expected despite a strong December,” said Premier Foods chief executive Gavin Darby.
“We now expect category performance to remain challenging during the fourth quarter and as a result sales will be below previous expectations. Additionally, recovery of significant input cost inflation in certain areas is taking longer than originally foreseen.”
Total sales in Premier Foods Grocery business were were 1.9% lower as strong non-branded sales +13.0% were offset by weaker branded sales, down 3.8% in the quarter, the company said. International sales grew by 15%, driven by a strong performance in Australia.
Commenting on its performance, Darren Shirley of Shore Capital Stockbrokers said, “Premier Foods’ Q3 FY2017 trading update has revealed a further period of disappointing trading which, coupled with input cost-driven margin pressure has resulted in a profits warning. Management are now guiding to trading profits c10% below previous expectations. We, therefore, lower our trading profits forecast by 10% from £131.4 million to £118.3 million.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.